Poverty is due to moral lacking

[lucy]

Umm ... haven't recent economic developments pretty much proven that market theories are just that: Theories?

[Thorne]

Umm ... haven't recent economic developments pretty much proven that market theories are just that: Theories?

Depends on how you're using the term 'Theory'. The layman's concept of a theory is basically that it's little more than an educated guess, and that almost any theory is just as valid as any other. But in scientific terms (and yes, economics is a science, if not a rigid one) a theory is a model of reality. It explains what can be shown to be true, and predicts new facts which may not yet be understood.

The problem with economic theories as I see them is that they rely on the actions of people, which is a very difficult thing to model. And in the modern world, with almost instantaneous communications and global markets, the problems are multiplied exponentially. When you add in government interference, the results become completely unpredictable. The models might work, on a small scale, but be completely useless once government regulations alter the playing field.

[lucy]

But in scientific terms (and yes, economics is a science, if not a rigid one) a theory is a model of reality. It explains what can be shown to be true, and predicts new facts which may not yet be understood.

Not in this case. In this case, we tried to model reality according to the theories. Well, not we, since I didn't ....

The problem with economic theories as I see them is that they rely on the actions of people, which is a very difficult thing to model. And in the modern world, with almost instantaneous communications and global markets, the problems are multiplied exponentially. When you add in government interference, the results become completely unpredictable. The models might work, on a small scale, but be completely useless once government regulations alter the playing field.

Sorry, but in recent years it was the economists who dictated the rules, the politicians just followed them blindly. It really wasn't the other way round. At least that's the impression I got here.

[thir]

Depends on how you're using the term 'Theory'. The layman's concept of a theory is basically that it's little more than an educated guess, and that almost any theory is just as valid as any other. But in scientific terms (and yes, economics is a science, if not a rigid one) a theory is a model of reality. It explains what can be shown to be true, and predicts new facts which may not yet be understood.

If economics is a science, it is one trying to operate with so many variables it becomes useless. One of which is the incompetance of banks.

Anyway, it is not a science. It is armchair thinking, and much more political ideology than logic or knowledge.

The problem with economic theories as I see them is that they rely on the actions of people, which is a very difficult thing to model. And in the modern world, with almost instantaneous communications and global markets, the problems are multiplied exponentially. When you add in government interference, the results become completely unpredictable. The models might work, on a small scale, but be completely useless once government regulations alter the playing field.

In fact, nothing but a lot more control of this wild capitalism will save another crisis, and another.
The news on our tv was that if Obama and senate/rep had not made this temporary compromise, US would have had to stop paying its officials and vital functions within a very short time.

[Thorne]

If economics is a science, it is one trying to operate with so many variables it becomes useless.

Well, I used the term loosely. It IS a science, but a "soft" science, like psychology. Rather than predicting definitive outcomes, it predicts trends. And yes, it is far from precise.

One of which is the incompetance of banks.

Actually, it's the incompetence of BANKERS that is the problem, and economic theory can take that into account. It's just not comfortable when you do, so many economists ignore that, preferring to blame the "volatility of the market."

It is armchair thinking, and much more political ideology than logic or knowledge.

In large part it's a combination of all of these. Which makes it very easy to misuse.

In fact, nothing but a lot more control of this wild capitalism will save another crisis, and another.

I disagree. Removing the controls of capitalism would work far better, I think. Tighten the controls on monopolies, of course, and strengthen consumer protections, but let the markets work. A competitive marketplace has always been beneficial to both industry and consumers. Adding regulations which make it impossible for innovators to break into the marketplace only makes things worse.

The news on our tv was that if Obama and senate/rep had not made this temporary compromise, US would have had to stop paying its officials and vital functions within a very short time.

Doubtful. A good reason not to put to much stock into TV news. NON-vital functions might have had to be stopped, temporarily, which would not have been good for those government workers, but no way they would let the vital functions shut down.

[thir]

Doubtful. A good reason not to put to much stock into TV news. NON-vital functions might have had to be stopped, temporarily, which would not have been good for those government workers, but no way they would let the vital functions shut down.

They would have had no choice. I do not place too much stock in tv news, but this kind of thing is not something you just bandy about. And previous craches have been foreseen.

[Thorne]

They would have had no choice. I do not place too much stock in tv news, but this kind of thing is not something you just bandy about. And previous craches have been foreseen.

There have been threats like this before. No one has ever really seen WHAT might happen. I can say, though, that it's doubtful the politicians will lose any money over it.

[DuncanONeil]

I was working for the Government during a period of time when there were 15 shutdowns of Government. As I was working for various parts of DoD never once did I get sent home.

There have been threats like this before. No one has ever really seen WHAT might happen. I can say, though, that it's doubtful the politicians will lose any money over it.

[thir]

There have been threats like this before. No one has ever really seen WHAT might happen. I can say, though, that it's doubtful the politicians will lose any money over it.

No, it would be a number of official functions shutting down because they cannot be paid for.

[DuncanONeil]

The Government has shut down a bunch of times. every time it has only been non-essential services. In simple terms the military do not get furloughed, though the civilians in Supply would likely.

They would have had no choice. I do not place too much stock in tv news, but this kind of thing is not something you just bandy about. And previous craches have been foreseen.

[DuncanONeil]

Umm ... haven't recent economic developments pretty much proven that market theories are just that: Theories?

Gravity is a theory!!

So the answer to your question is, no. Besides the "problem" with "economic developments" was in fact Government intrusion in the first place!

[lucy]

Gravity is a theory!!

So the answer to your question is, no. Besides the "problem" with "economic developments" was in fact Government intrusion in the first place!

Yes, gravity is a theory. But unlike economic theories it actually works in everyday life. At least I didn't float upwards this morning when I got out of bed.

[Thorne]

Yes, gravity is a theory. But unlike economic theories it actually works in everyday life. At least I didn't float upwards this morning when I got out of bed.

Not quite! The theory doesn't WORK, it EXPLAINS! Gravity worked long before there were any theories about it.

But just imagine what would happen if, for example, scientists discovered that gravity depended upon a certain number of people spending a certain amount of their money over a certain period of time. As long as those conditions persisted, gravity worked. Then, along comes some idiot movie/sports star and says that, no, people would be better off if they spent MORE money, faster. Suddenly gravity no longer works! The theory may be sound, but the application of the theory has been sidetracked.

This is kind of what happens with economic theory. Under the right conditions, those theories will explain what's happening. But when conditions are altered, generally by some pretty face, or a politician, or any of a number of absolutely inane possibilities, the theories can no longer be used as models. So the economists say, given a population of X, which has a disposable income of Y, performing Z actions will help the economy improve. Politicians say, great! Let's do that, and pass the required laws. Along with new tax laws, and new spending bills, and more appropriations, all of which alter the value of Y, making the whole equation worthless.

[DuncanONeil]

All theories are subject to testing!

Not quite! The theory doesn't WORK, it EXPLAINS! Gravity worked long before there were any theories about it.

But just imagine what would happen if, for example, scientists discovered that gravity depended upon a certain number of people spending a certain amount of their money over a certain period of time. As long as those conditions persisted, gravity worked. Then, along comes some idiot movie/sports star and says that, no, people would be better off if they spent MORE money, faster. Suddenly gravity no longer works! The theory may be sound, but the application of the theory has been sidetracked.

This is kind of what happens with economic theory. Under the right conditions, those theories will explain what's happening. But when conditions are altered, generally by some pretty face, or a politician, or any of a number of absolutely inane possibilities, the theories can no longer be used as models. So the economists say, given a population of X, which has a disposable income of Y, performing Z actions will help the economy improve. Politicians say, great! Let's do that, and pass the required laws. Along with new tax laws, and new spending bills, and more appropriations, all of which alter the value of Y, making the whole equation worthless.

[Thorne]

All theories are subject to testing!

Not necessarily. From a book I'm reading: "... only that which is experimentally observed, or that which can be logically connected to experimental observation, has any reality."
There are some things which cannot, yet, be directly observed. They can be logically deduced, based on other observations, but not measured directly. A black hole is a perfect example. We cannot see what happens inside the event horizon, but by observing effects OUTSIDE, scientists can deduce what is happening inside. They can then predict OTHER effects which SHOULD happen if their hypotheses are right, and if those effects are observed the theory is strengthened.

[DuncanONeil]

Factually true I agree. But this could be considered a form of testing.

Not necessarily. From a book I'm reading: "... only that which is experimentally observed, or that which can be logically connected to experimental observation, has any reality."
There are some things which cannot, yet, be directly observed. They can be logically deduced, based on other observations, but not measured directly. A black hole is a perfect example. We cannot see what happens inside the event horizon, but by observing effects OUTSIDE, scientists can deduce what is happening inside. They can then predict OTHER effects which SHOULD happen if their hypotheses are right, and if those effects are observed the theory is strengthened.

[thir]

This is kind of what happens with economic theory. Under the right conditions, those theories will explain what's happening. But when conditions are altered, generally by some pretty face, or a politician, or any of a number of absolutely inane possibilities, the theories can no longer be used as models. So the economists say, given a population of X, which has a disposable income of Y, performing Z actions will help the economy improve. Politicians say, great! Let's do that, and pass the required laws. Along with new tax laws, and new spending bills, and more appropriations, all of which alter the value of Y, making the whole equation worthless.

Well, reality - a world full of different and increasingly complicated and interrelated economies and wheather and natural disasters and politcal changes and wars and what not - is far too complicated for any theories.

A bigger problem is that economics are not science, a bunch of theories does not science make. Science means proving stuff, in ways that can be dublicated.

Further more, said theories are based on idelogies about what aught to happen if you do X Y and Z, sort of in a lab with no distraction from real life.

[DuncanONeil]

Alright then Global Warming is a theory!

Yes, gravity is a theory. But unlike economic theories it actually works in everyday life. At least I didn't float upwards this morning when I got out of bed.

[Thorne]

Alright then Global Warming is a theory!

Well, technically, Global Warming is a fact, just like Gravity and Evolution. The MECHANISMS of global warming, or evolution, or gravity, are theories.

[DuncanONeil]

I was going to say AGW but thought the meaning would be lost!

Well, technically, Global Warming is a fact, just like Gravity and Evolution. The MECHANISMS of global warming, or evolution, or gravity, are theories.

[Thorne]

I was going to say AGW but thought the meaning would be lost!

Yes, AGW is a theory: which means there is ample evidence for it. It explains that evidence better than any other speculation by deniers. While it is not the ONLY mechanism driving climate change, it is currently the best explanation for the data being found. Unlike the idiotic rationalizations thrown out by deniers, especially the "God will protect us" group, like Perry and Bachmann.

[thir]

Umm ... haven't recent economic developments pretty much proven that market theories are just that: Theories?

Yes!